Search found 11 matches

by matthewmatt
Mon Sep 04, 2017 8:22 pm
Forum: Investing - Theory, News & General
Topic: Bond Funds
Replies: 5
Views: 738

Bond Funds

It is well known that in times of rising interest environments (likely in the near future), bond mutual funds temporarily lose value. This temporary drop is more severe with longer-term than with shorter-term bonds. Please see historical data from Vanguard below: http://i66.tinypic.com/kb8twm.jpg I ...
by matthewmatt
Thu Aug 24, 2017 7:57 pm
Forum: Investing - Theory, News & General
Topic: the "correct" PE ratio
Replies: 6
Views: 928

Re: the "correct" PE ratio

I got this reply from my financial adviser: Essentially, there are three types of P/E ratios and they’re all a function of how you calculate earnings. 1) Last 12 Months (P/E LTM) a. Price / last year’s earnings b. This is universally used and accepted to value individual stocks . One problem with th...
by matthewmatt
Sun Aug 20, 2017 7:48 pm
Forum: Investing - Theory, News & General
Topic: Japanese Bubble Burst 1989
Replies: 78
Views: 7777

Re: Japanese Bubble Burst 1989

I have a great respect for Nobel laureate Schiller. In 2005, I moved to Florida and thought of buying one condo. The seller convinced me I should buy five, not one, and sell them later for profit. I accepted his proposal and on the way to see him and mortgage representative I stopped at Starbucks fo...
by matthewmatt
Sun Aug 20, 2017 7:12 pm
Forum: Investing - Theory, News & General
Topic: Japanese Bubble Burst 1989
Replies: 78
Views: 7777

Re: Japanese Bubble Burst 1989

Using http://www.moneychimp.com/features/market_cagr.htm I got these figures: Jan 1, 1901 to Dec 31, 1915 1 dollar grew to 1.99 adjusted for inflation Jan 1, 1929 to Dec 31, 1943 1 dollar grew to 1.10 adjusted for inflation Jan 1, 1966 to Dec 31, 1980 1 dollar shrunk to 0.97 adjusted for inflation J...
by matthewmatt
Sun Aug 20, 2017 12:49 pm
Forum: Investing - Theory, News & General
Topic: Japanese Bubble Burst 1989
Replies: 78
Views: 7777

Re: Japanese Bubble Burst 1989

Just a brief reminder about the resilience of US stock market: During the greatest crush in the US history the value of DJ fell to about 11% in only 2 years and half (DJ on September 3, 1929 was 381.17; on July 8, 1932 only 41.22). Yet if you could have bought SP500 15 years earlier, on July 8, 1917...
by matthewmatt
Sat Aug 19, 2017 5:20 pm
Forum: Investing - Theory, News & General
Topic: Japanese Bubble Burst 1989
Replies: 78
Views: 7777

Re: Japanese Bubble Burst 1989

I just found on line calculator. One thousand US dollars invested in Nikkei 225 index at the peak of the bubble would be worth 697 dollars today (with dividends reinvested). Adjusted for inflation, the sum would be only 363 dollars. Definitively a huge loss. https://dqydj.com/nikkei-return-calculato...
by matthewmatt
Sat Aug 19, 2017 11:53 am
Forum: Investing - Theory, News & General
Topic: Japanese Bubble Burst 1989
Replies: 78
Views: 7777

Japanese Bubble Burst 1989

Japanese stocks reached all time peak on December 29, 1989. The Nikkei 225 average closed at 38,915.87, having grown sixfold during the decade. Subsequently, it lost nearly all these gains, closing at 7,054.98 on March 10, 2009—81.9% below its peak twenty years earlier. Yesterday, on August 18, 2017...
by matthewmatt
Sun Jul 23, 2017 1:20 pm
Forum: Investing - Theory, News & General
Topic: the "correct" PE ratio
Replies: 6
Views: 928

the "correct" PE ratio

To calculate how expensive stocks are we most commonly use PE ratio trailing the 12 months earnings. However, the values available on-line differ significantly from one source to the other. For example, according to the calculator A, the PE in January 2009 was 122.41, but according to the Morning st...
by matthewmatt
Sun Jul 16, 2017 6:32 pm
Forum: Investing - Theory, News & General
Topic: historical data for REITs and Foreign Stocks
Replies: 0
Views: 255

historical data for REITs and Foreign Stocks

We know that the average P/E ratio for SP-500 during 1926-2015 was 15.8 According to Fama and French, the annualized returns for US stocks between 1926 and 2000 were as below. Large Value Stocks: 12.87% Large Growth Stocks: 10.77% Small Value Stocks: 14.87% Small Growth Stocks: 9.92% I wonder if any...
by matthewmatt
Sat Jul 15, 2017 8:36 am
Forum: Investing - Theory, News & General
Topic: Is now time to move into international stocks?
Replies: 57
Views: 7212

Is now time to move into international stocks?

Two days ago I checked the valuations for Vanguard's large blend indexes. US stocks have currently higher valuations (higher PE ratio) than the rest of the world, meaning that US stocks have smaller expected returns. TYPE OF STOCK MARKET / TICKER / PE RATIO TOTAL WORLD STOC M VTWSX 22.7 TOTAL WORLD ...
by matthewmatt
Thu Jul 13, 2017 5:02 pm
Forum: Investing - Theory, News & General
Topic: depleting accounts in retirement
Replies: 27
Views: 5249

depleting accounts in retirement

When retired, it is in general most prudent to deplete taxable account first, tIRA second and roth IRA last. In general, it is also advisable to keep most bonds in IRAs and most stocks in traditional accounts. However, because we will first deplete taxable accounts, it would be smartest if taxable a...